St. Paul, Minnesota — On Tuesday, the House DFL released details on a $250 million property tax relief package for Minnesotans that includes direct property tax relief to homeowners, renters and modernizes the state's local government aid formula. As many as one million Minnesotans will see direct, targeted property tax relief through the proposal.
The House DFL plan will provide direct property tax relief to middle class Minnesotans by providing $157 million for the Homestead Credit Refund. Property taxes have risen 86 percent in the last decade and the previous legislature eliminated the Homestead Credit, causing property taxes to increase $370 million statewide.
“This is great news for the people of Minnesota, especially for us in Greater Minnesota where property taxes have increased eight times more than in the metro, and Greater Minnesota business taxes have increased three times more than the metro,” said Rep. John Ward (DFL – Baxter). “Middle-class property tax relief is one of our top priorities and we’re going to get it done this session.”
Under the Homestead Credit Refund:
· More than 300,000 homeowners (75 percent of filers) will see a refund increase
· More than 100,000 additional homeowners will be eligible for a refund
· The average homeowner will see their refund increase by $212
· A grand total of 636,000 homeowners will see direct property tax relief
“After a decade of property tax increases squeezing the middle class, this proposal will be a change from the status quo and will put money in the pockets of middle-class Minnesotan families, seniors and renters,” said Rep. Joe Radinovich (DFL – Crosby). “By reducing property taxes on middle-class Minnesotans, we can give job creation and our economy a boost.”
In addition to providing middle class homeowners a refund, the DFL proposal includes $15.5 million for the Renter’s Credit. The Renter’s Credit is a refund that provides direct property tax relief to low- and middle-income renters. The previous legislature raised property taxes on renters who earn less than $55,000 a year by cutting the Renter’s Credit. Renters saw their property taxes increase by an average of $87. The new proposal enhances the renter’s credit by increasing the maximum refund allowed for renters. 66,000 filers will see a bigger refund and a total of 340,000 renters will see property tax relief through the Renters’ Credit.
The DFL is proposing the most significant Local Government Aid (LGA) reform in over a decade, including $60 million for Local Government Aid and $28 million for County Program Aid. The LGA formula is meant to provide cities with state aid when their essential needs exceed the amount that they can raise in property and local taxes. Many Greater Minnesota communities have faced severe LGA cuts in recent years, forcing them to cut back or eliminate vital city services.
“For years many of our local communities have either had to choose between raising property taxes or cutting essential services, and that’s a lose-lose situation for our cities and counties,” said Rep. Ward. “We need to rework the aid system to local governments and actually fund it — and that’s what this proposal will do.”
In District 10A, Brainerd would receive an 8 percent increase in LGA, Pequot Lakes would receive a 15 percent increase, and Jenkins would receive LGA dollars for the first time. In District 10B Aitkin would receive a 2 percent increase, Deerwood would receive a 250 percent increase, Crosby would receive a 6 percent increase, Tamarack would receive a 5 percent increase, and Cuyuna would receive a 190 percent increase.
The new property tax relief proposal includes an updated LGA formula that is stable, easier to understand, and predictable. The new formula is need-based, and provides the most aid to the communities with the greatest need.
“This proposal gives our cities and counties a much more stable and reliable source of state aid that they can then depend on as they make financial and service plans,” said Rep. Radinovich. “These reforms and new investments will help our communities sustain or expand the local services that families and businesses depend on.”
Reps. Ward and Radinovich encourage constituents to contact them with any questions, comments, concerns, or ideas on any legislative topic. Rep. Ward can be reached by phone at 651-296-4333 or by email at rep.john.ward@house.mn. Rep. Radinovich can be reach by phone at 651-296-2365 or email at rep.joe.radinovich@senate.mn.